Merrill Lynch to write-off £8 billion this year

Merrill Lynch, the troubled US investment bank, which is expected to be hit by a total credit crunch write-off of $16 billion (£8 billion) this year, is understood to be in advanced talks with the Singapore Government’s Temasek Holdings over a $5 billion (£2.5 billion) injection of capital. Merrill has been one of the world's biggest sub-prime casualties and is expected to write down a further $8 billion (£4 billion) in the fourth quarter, which could take its total mortgage losses this year to $15.9 billion (£8 billion).

It is understood that this morning, the board of Temasek has been given preliminary approval for the investment in Merrill, although price, timing and regulatory issues have yet to be negotiated. Analysts have suggested that if Merrill’s write downs get much worse, it could sell its 20% stake in Bloomberg, the financial information company, or its 49% stake in BlackRock, the US fund manger. Temasek Holdings is one of two Singapore Government investment vehicles and one of the oldest sovereign funds, with an estimated $108 billion (£54 billion) of assets and owns 15.3% of Standard Chartered, the Asian-focused UK bank.

On Wednesday, rival bank Morgan Stanley said it would sell a 9.9% stake to state run China Investment Corp for $5 billion (£2.5 billion) and last month Citigroup, received a $7.5 billion (£3.75 billion) of fresh cash from the Abu Dhabi Investment Authority. (source: Timesonline)

Oracle proves everyone wrong

Concerns that slowing economic growth would cause key customers to throttle technology spending, were shucked yesterday by software industry mainstay Oracle. An expansion into specialty software markets and a tight rein on expenses helped Oracle turn in a strong second quarter and issue an upbeat outlook for the third, as net income rose 35%, to $1.3 billion (£650 million) in the quarter that ended November 30Th. Revenue increased 28%, to $5.3 billion (£2.65 billion), surpassing the $5.04 billion (£2.52 billion) expected by analysts. Sales of new software licenses, a closely watched indicator of future revenue, climbed 38%, exceeding Oracle's forecast that the bookings would increase between 15% and 25%.

CEO of Oracle, Larry Ellison, said “Oracle plans to expand into additional industry areas. That's our strategy for growth." Oracle also said revenue would increase between 21% and 24% in the current quarter, which ends in February. Analysts expected Oracle to increase revenues by 18% in the third quarter.

Oracle is the top supplier of database software and an emerging power in business applications, which companies use to forecast sales, plan production schedules, and manage budgets. Oracle has spent more than $24 billion (£12 billion) to buy more than 40 companies since the beginning of 2005 to gain ground in the applications market from leader SAP.

Analyst expected Oracle to fail in buying so many companies as they would fail to integrate all application. But they're just obliterating revenue and earnings expectations by acquiring companies. It proved that Mr Larry Ellison was right yet again as Oracle stock gained 6.6%, to $22.12 (£11.06), in extended trading. As of the close, Oracle shares had risen 21% in 2007, while shares of SAP have slumped more than 4%. (source: Businessweek)

Viacom Inc. said yesterday that it has selected Microsoft Corporation as its internet advertising partner in a five-year agreement initially valued at an estimated $500 million £250 million) that involves online games, shows and movies. Microsoft will help Viacom place advertising on Viacom's U.S. Web sites and be the exclusive seller of its remnant display advertising, or ad space Viacom has been unable to sell.

As part of the deal, Microsoft will also license on a non-exclusive basis long and short-form television and movies from Viacom for the MSN portal and the Xbox 360 game system's online network. Microsoft has also agreed to buy ads on Viacom's broadcast and online networks over five years and help Viacom establish itself as a publishing partner on Microsoft's casual Internet gaming sites.

The Redmond, Washington-based software maker has attempted to make inroads against Google Inc. online advertising business over the past year as each company has raced to purchase new advertising businesses. Yahoo signed a deal in April with Viacom to provide search advertising for 33 of its Web sites, which remains in place. (source: Reuters)

The Competition Commission has made its decision on the BskyB stake in ITV and confirmed that, the satellite broadcaster, should cut its stake in ITV to below 7.5% because the shareholding reduces competition in the all-TV market and works against the public interest.

If BSkyB sold 10.4% of its 17.9% ITV holding at the price of 84.2p, it would crystallise a loss of £205 million. John Hutton, the Secretary of State for Business, has until January 29, 2008, to consider the Competition Commission's report and announce final decisions, but in publishing the findings early he has indicated he is minded to accept its possible remedies.

The move re-opens the door for Virgin Media and other potential suitors to attempt a merger with ITV. As the market opened, shares in ITV rose by 1.2p to 84.2p on possible takeover speculation, while BSkyB shares were virtually unchanged.

The watchdog decided against forcing BSkyB to sell the whole of its 17.9 per cent stake as demanded by Virgin Group, saying that a partial sale was less intrusive and that with a holding below 7.5% Sky would be unable to materially influence ITV's strategy.

A statement from BSkyB said that the broadcaster was considering the contents of the Commission's report carefully. It said: "The next phase of this process lies with the Secretary of State. We will be making representations to him in due course." BSkyB snapped up the stake in ITV for £940 million, or 135p a share, in November 2006 when NTL, its pay-TV rival, was trying to mount a takeover.

BSkyB, where former chief executive James Murdoch replaced his father Rupert as non-executive chairman this month (News Corporation on taking over Dow Jones), has always insisted that it had not broken any merger rules when it acquired its ITV stake, which it called a long-term investment. (source: Timesonline) - Heathrow voted worst airport (article on BSkyB ITV shares), Virgin Lost 40 000 customers & Sainsbury's Bid dropped (includes aticle on Virgin & BskyB sales)

New bidder for Northern Rock

A newcomer to save Northern Rock, Bradford & Bingley, has approached the stricken bank about buying assets. According to reports, the buy-to-let firm and mortgage lender is not looking to buy the troubled Newcastle-based bank outright, but could become part of a private-sector rescue package.

Two preferred bidders, Virgin Group and Olivant, are vying to take control of the stricken bank as discussed in earlier articles and press releases. Northern Rock has an attractive portfolio of mortgage assets which Bradford & Bingley would be happy to hold.

Bradford & Bingley, which has been plagued by concerns over its liquidity since Northern Rock's problems emerged, has, on paper, a more risky portfolio of lending since more than half of its business is in the buy-to-let market and 20% of its lending is on self-certified mortgages. Adding Northern Rock's quality assets to Bradford & Bingley should give ballast to the buy-to-let specialist's loan book.

Last month Bradford & Bingley went some way to easing fears over its liquidity by selling £4.2 billion of loans, which gave it a substantial cash cushion in preparation for further tightening of credit markets. Northern Rock's shares rose 6.6% this morning to 91.7p in early trading, while Bradford & Bingley's climbed 0.5% to 258.75p. (source: Timesonline) - Northern Rock dreams fading, New Bid for Northern Rock by Olivant, Northern Rock offers below value, Final bids for Northern Rock today, New player in Northern Rock bid, Virgin pushes forward in takeover, BAA must halve queueing times to avoid fines, SAB Miller to buy Royal Grolsch, BHP Billiton's offer rejected, News Corporation on taking over Dow Jones

Sports Direct today reported a 70% slump in first half profits and failed to name a new chairman for the troubled sportswear retailer after a seven month long search. The company, has issued two profit warnings since its flotation in February and blamed the decline on bad weather and the England football team's failure to qualify for the European Championships.

Profits for the six months to October 28 fell from £70.1 million to £21.2 million as sales fell by 7.1% to £668.1 million. Since floating in February, Sports Direct's shares have fallen in value by 70% to a current all-time low of 84.25p.

Sports Direct has been without a non-executive chairman since May when David Richardson, the former finance director at Whitbread quit after differences with the board.

Sports Direct refused to comment on its search for a chairman or its stake in Umbro, which is being pursued by Nike. Mike Ashley, Sports Direct's owner, added he had no intention of taking the company private. (source: Timesonline) - Northern Rock dreams fading, Alitalia SpA in sight for Air France-KLM, Sports Direct to block Nike takeover

The internet auction house formerly known as QXL Ricardo has been agreed to be bought by Naspers, Africa's largest media group. The sale for Tradus (new name for QXL), has been set for an all cash deal £946 million, which is £18 per share.

Having weathered the dot-com bust of the late 1990s, the FTSE 250-listed group has since been embroiled in a series of long-running legal disputes over the ownership of key assets, bitter shareholder wrangles and failed bids. The takeover will also unlock a £123 million payout to three managers of Tradus’s Polish operations.

The group of Polish executives, led by Arjan Bakker, was accused by the main board of what was then QXL Ricardo of wresting control of the Polish business "fraudulently", through an improper share issue. A three-year legal battle followed and that was finally settled with the fast-growing Polish unit, which also includes operations in the Czech Republic, Ukraine and a Hungarian joint venture, being reintegrated into the parent company.

EBay, the US online auction giant, which is currently planning a revamp of its own business, has held talks several times over the years with Tradus. Shares in Naspers fell as much as 11% in Johannesburg, with investors concerned over the agreed price.

The Naspers proposal represents a 19% premium to share price before Tradus revealed that it had received an approach, on November 7. Ahead of the approach being made public, Tradus traded at about 63 times earnings for the previous year, compared with about 26 times for eBay.

The company, which operates sites in Poland, Czech Republic, Hungary, Ukraine and Russia, is also is diversifying from trading & auction sites into classifieds advertising, price comparison sites and online payment services.

When the group received a failed bid from Florissant, a private equity group, in 2005 it was valued at less than £30 million. At its peak, the former dot-com darling, founded by the journalist Tim Jackson, was briefly worth more than £2 billion. Florissant, which holds a 15% stake, will join Izaki, the Israeli investor group, with 14%, in also receiving a windfall profit from the sale to Naspers.

Tradus recently reported a 165 per cent jump in first-half pre-tax profit, to £3.68 million. Naspers, meanwhile, has been expanding overseas. The group, which owns South Africa's largest daily newspaper, the Daily Sun, and the pay TV outfit MultiChoice, has been building up its operations in sub-Saharan Africa, China and Russia. (source: Timesonline)

Velocity Interactive Group - New Investment Company

Two high-profile media and Internet executives will join with venture fund ComVentures to form a new investment company with $1.5 billion in assets. The two high-profile executives will be, former AOL Chief Executive Jonathan F. Miller and former Fox Interactive Media President Ross Levinsohn. The partnership with ComVentures will form a new group focused on investing in Internet and media companies, and will be announced today. The firm will be named Velocity Interactive Group.

ComVentures, Palo Alto, California, has focused on early-stage investments in communications equipment and services and the current fund of ComVentures's will move to the new company. It is providing the $1.5 billion (£750 million) in funding. Partners at the new firm said they will try to raise more money next year.

The firm is looking for investments in both early-stage companies and larger growth companies. Investments will be as small as $500 000 (£250 000), though Velocity expects investments in a company could grow to between $5 million (£2.5 million) and $30 million (£15 million). Velocity also plans today to announce its first investments. They include NDTV Networks, an Internet video and television producer in India. In the U.S. the firm has funded three companies that include Fabrik, a Web site consumers can use to store and manage their videos, photos and other digital creations.

Mr. Miller was chief executive of Time Warner Inc.'s AOL division from 2002 to 2006. Mr. Levinsohn formed News Corp.'s Internet division in 2005 and spearheaded the purchase of the social networking Web site MySpace.com. Mr. Levinsohn left News Corporation. in late 2006. (source: The Wall Street Journal)

Nintendo, makers of the sought after Wii video games console, will miss out on an estimated $1.3 billion (£639 million) in sales this Christmas by failing to meet soaring global demand for its Wii video games console.

Production has been hit by shortages of components and it insists it is doing all it can to meet demand. Some analysts believe, however, that the company privately welcomes tight supplies because it wants to delay market saturation to prolong interest in the console.

Nintendo has raised production targets several times in recent months and now plans to ship 17.5 million units globally this year, up from 14 million. It said that demand “has been higher than we could ever have anticipated and the company is withdrawing planned television advertising for the Wii because of severe shortages of the games console in the run-up to Christmas.”

Stock market investors appear to believe that Nintendo can maintain its success. Over the past two years the group’s shares have risen fivefold to make the company Japan’s third most valuable quoted business. However, last month Sony’s PlayStation 3 beat the monthly sales of the Wii in Japan for the first time, signalling that the battle between the two next-generation consoles may yet have further to run. Sony sold 183,217 PS3s in Japan in the four weeks to November 25, against sales of 159,193 for the Wii. (source: Timesonline)

Air France-KLM sought to deal a death blow to the rival airline bidding for Alitalia, Italy's loss-making national carrier, by unveiling a £530 million plan to refurbish the carrier's fleet. Yesterday, analyst saw the Franco-Dutch giant as the heavy favourite to win the 49.9% stake that is being auctioned by the Italian government. Air France is bidding against Air One, a domestic Italian carrier. Under Air France's plan, it would raise the £530 million through the issuance of new shares, which it would use to update the interior of Alitalia's planes and to launch a marketing plan to attract international clients back to the carrier. It would also replace the company's old Boeing 767s and McDonnell Douglas MD80s with new aircraft.

The Italian government is expected to make its decision today. If a definitive winner is chosen, it would bring to an end a long and sorry chapter for the Italian government, which first signalled its intention to sell its stake in the carrier a year ago. The process has run into problems repeatedly, most recently in October when the last of the previous bidders dropped out of the auction over objections to onerous terms that were being imposed by the government. (source: The Independent) - ArcelorMittal to by China Oriental Group Co., Alitalia SpA in sight for Air France-KLM

Arriva outperforming Virgin Rail

Arriva boasted today that the sacking of Virgin from the long-distance CrossCountry train network has led to an immediate and dramatic improvement in performance. After a decade of disappointments since privatisation and despite the introduction of smart Voyager trains, Virgin Rail - a joint venture between Sir Richard Branson and Stagecoach - was relieved of CrossCountry on 11 November 2007.

In a thinly veiled attack on previous management, Arriva said today: 'With 86.3% of services arriving on time over the first four weeks of operation, that is substantially better than the equivalent services run in the same period last year.'

Arriva has not been immune from hashing up in the past, having been sacked from its North of England train franchise in a maelstrom of strikes and poor services, but it claims things have changed. According to the most recent National Rail Trends 2007-8 performance report, it is confirmed as the UK's most improved rail operator with 92.3% of its services arriving on time compared with 85.7% for the same period last year.

The company, which also runs buses in London, said it is on track to make the £121 million pre-tax profits expected by analysts. (source: thisismoney.co.uk)

Tata, is to be named as the preferred bidder for Ford’s Land Rover and Jaguar brands in the next few days as the Indian Company is trying to bring the world’s cheapest car to the South Asian country. Tata is the front-runner in a race that includes Mahindra & Mahindra, a fellow Indian car group, and One Equity, the American buyout group.

Tata is set to roll out a 100,000 rupee (£1,200) “People’s Car” next year. Ratan Tata, the chairman, has said that he wants the cut-price vehicle to help poorer Indians to upgrade from motorcycles, which currently transport entire families, to cars.

If Ford chooses Tata, it will be an historic moment for the car industry, marking the first time that a major Western car group has been bought by an Indian company. Ford, the US carmaker is expecting to make up to £1 billion from the sale, although it is expected to keep some form of equity interest in the devolved business.

Tata, a conglomerate whose interests range from salt mining to software engineering, has been gradually expanding in the UK, where it owns the Tetley tea brand, and it is now the world’s fifth-largest steelmaker after buying Corus. Jaguar and Land Rover together employ 15,000 in Britain. It is understood that Tata plans to retain all three of the UK factories, at Solihull and Castle Bromwich in the Midlands and Halewood on Merseyside.

Ford sold Aston Martin earlier this year. The company is struggling to return to profitability after record $12.7 billion (£6.3 billion) losses last year. Tata’s image as a mass-market supplier took a knock at the beginning of the year during protracted negotiations over land for its small car plant in West Bengal, which ended in violence. (source: Timesonline) - Acer & Tata in today's news

Northern Rock dreams fading

There are only two interested parties left in the dying dreams of Northern Rock - Sir Richard Branson's Virgin Group and Olivant, the firm led by former Abbey National banker Luqman Arnold. Even that might be over optimistic as Olivant wants to bypass the formal process, which has a February deadline. It wants its executives in place by Christmas and thinks delay would further damage Northern Rock.

Olivant's interest is fading, and it was probably no coincidence that Adam Applegarth, the Rock's chief executive, was pushed out very early yesterday. His departure was an admission that Olivant is right about one thing: it is time to get real. It is also time to drop the pretence that this is an auction. Nobody has ever proposed buying Northern Rock with all its assets and all its liabilities. It has been a competition to see who could best safeguard taxpayers' money.

Solutions to Northern Rock – Olivant’s proposal is to repay £10 billion to £15 billion of the £25 billion immediately and this gap between the figures illustrates the degree of wishful thinking running through the plan. The Virgin solution - on the sketchy public details - doesn't sound much better. Its management has no experience of running a bank with a £110 billion mortgage book, and the Virgin name has made little impact on the financial services industry in 10 years of trying. When the taxpayer is on the hook for £25 billion, those facts can't be ignored.

Things actually got worse last night and The Virgin Group was stripped of its preferred bidder status in the battle for Northern Rock after rival Olivant threatened to walk away unless it was put on an equal footing with Sir Richard Branson’s company. Northern Rock agreed to the measure at a meeting with representatives of the Treasury, the Bank of England, the Financial Services Authority and the bidding consortium, which is led by Luqman Arnold, the former chief executive of Abbey. In exchange, Olivant agreed to remain in the auction until at least mid-January.

In a preclose statement yesterday, the Rock unveiled a £281 million write-down on sub-prime mortgage investments, including a £118 million hit on structured investment vehicles (SIVs) and a further £32 million from higher-risk SIV-lites. It did not change its September forecast of underlying pretax profits in 2007 of between £500 million and £540 million.

Meanwhile, Andy Kuipers, Northern Rock’s sales and marketing director, yesterday replaced chief executive Adam Applegarth with immediate effect but the move failed to comfort shareholders, who saw the bank’s stock plunge more than 13%. (source: Guardian & Timesonline) - New Bid for Northern Rock by Olivant, Northern Rock offers below value, Final bids for Northern Rock today, New player in Northern Rock bid, Virgin pushes forward in takeover, BAA must halve queueing times to avoid fines, SAB Miller to buy Royal Grolsch, BHP Billiton's offer rejected, News Corporation on taking over Dow Jones

The Controversial Sports Direct founder and Newcastle United football club owner, Mike Ashley, faces a legal threat to his attempt to acquire Les Ambassadeurs, the London casino.
Although Mr Ashley’s estimated £95 million offer is believed to be the highest bid on the table, it is understood that Las Vegas Sands, the American gaming behemoth, is claiming it had previously agreed a deal at about £75 million, and the owner of Las Vegas Sands and one of the world’s richest men (£13 billion) is threatening to sue. The reason for sueing is because Mr Sheldon Adelson was understood to be the original bidder at £75 million.

Mr Adelson is also believed to have contacted rival bidders through his lawyers, Mishcon de Reya, claiming he has a binding verbal agreement to buy Les Ambassadeurs and threatening legal action against them if they attempt to gazump him.

In the early stages of the sale process analysts were tipping Harrah’s Entertainment, another Las Vegas gaming giant and the owner of LCI, the casino’s former owner. However, Harrah’s is itself the subject of a recommended $27.8 billion (£13.9 billion) takeover by Apollo Management and TPG Capital, and the buyout firms are said to have vetoed a purchase of Les A in the light of tough trading conditions in the UK.

Las Vegas Sands is believed to view Les Ambassadeurs as a strong brand that could be rolled out as part of Mr Adelson’s ambitious expansion plans. In addition to the Venetian Resort Hotel Casino and the Sands Expo and Convention Center in Las Vegas, it runs the Venetian Macao Resort Hotel and the Sands Macao.

Las Vegas Sands declined to make any comment, while Mr Ashley could not be reached for comment. (source: Timesonline) - Alitalia SpA in sight for Air France-KLM, Sports Direct to block Nike takeover

ArcelorMittal to by China Oriental Group Co.

The world’s largest steelmaker, ArcelorMittal, agreed to take over China Oriental Group Co. to gain a foothold in the fastest-growing steel market, valuing the company at a minimum of HK$18.6 billion ($2.4 billion or £1.2 billion). ArcelorMittal offered at least HK$6.355 for all the China Oriental shares it doesn't already own and said it plans to raise its stake to 73.13% from 28%.

The takeover may allow Chief Executive Officer of ArcelorMittal, Lakshmi Mittal, to bypass laws that restrict overseas control of steelmakers in an economy that expanded more than 11% in the first three quarters of the year. China has accounted for 65% of global growth in steel production in the past 10 years, and is now four times the size of the U.S. steel industry.

``Strengthening our position in the fast-growing Chinese market is one of the important elements in ArcelorMittal's strategy,'' Mittal said today. “We plan to develop China Oriental into a leading producer of heavy sections, focusing on leadership, quality and sustainability.''

Mittal is however still waiting for approval of his 2006 accord to buy a 38% stake in state-owned Laiwu Steel Corp., after the Chinese government last year tightened scrutiny of acquisitions by overseas companies. ArcelorMittal already holds about 29% stake in Hunan Valin Steel Tube and Wire Co. and has 12% of a Shanghai- based venture with Nippon Steel Corp. and Baoshan Iron & Steel Co. that supplies sheets to the automotive industry.

Hong Kong-listed China Oriental makes billets and strips, producing more than 3 million tons of crude steel a year. It posted a 769 million yuan ($104 million) profit from sales of 6.65 billion yuan for the six months ended June 2007. China Oriental will resume trading in Hong Kong at 2:30 p.m. local time after being suspended since Nov. 7, when they closed at HK$5.40. (source: Bloomsberg) - Merger would not affect ArcelorMittal

The internet search engine, Microsoft, has agreed to buy the privately owned British company, Multimap. Multimap is snapping at the heels of Google, the dominant online mapping service. The deal, understood to be worth slightly above $50 million (£24.4 million) and will further expand Microsoft’s fast-growing footprint in online and mobile advertising.

It will also deliver a $25 million (£12.5 million) windfall to Sean Phelan, the Multimap founder, who owned a majority stake in the business that he founded 12 years ago. Multimap’s 120 staff will share a further $13 million (£6.5 million), with an unnamed angel investor who holds the remaining 25% receiving a similar amount.

Multimap’s consumer-orientated website attracted more than four million unique users in the UK last month. It placed the site second in the British rankings, sandwiched between the market-leading Google Maps, which attracted about 11 million users last month, and Google Earth.

Multimap also operates in the commercial market, where it supplies online maps for websites run by other businesses. Clients include Ford and Royal Mail. The business-to-business service traditionally has delivered the lion’s share of Multimap’s revenues, but the consumer site is growing more quickly, Mr Phelan said.

The company is expected to post revenues of about £12 million this year. It made profits of nearly £900,000 in 2006. (source: Timesonline)

Air One was expected to be named at the preferred bidder for Alitalia by The Italian Government last night. Air One, owned by Carlo Toto, the Italian entrepreneur, faced competition from Air France-KLM. Air One was said to be the preferred bidder partly because it offered an “Italian solution” and partly because Air France-KLM wanted to downsize Milan Malpensa Airport.

Mr Toto said, “Obviously, some think that the Italian solution is the best right now”. However, Anpac, the pilots’ union, said that Air One’s business plan offered “no real European integration for the future Alitalia.”

AP Holding, the parent company of Air One, said that it had the support of four banks – Intesa Sanpaolo, Nomura, Morgan Stanley and Goldman Sachs. Reports said that AP Holding was ready to buy the Government’s 49.9% stake in Alitalia and try to buy out minority shareholders. Air One had guaranteed that it would maintain Alitalia’s two national hubs, at Rome and Milan, and up-grade international routes, with 90 new aircraft for short and medium-haul flights and 20 for long-haul services. It also planned to cut 2,750 jobs in a staff of 19,000. Air France-KLM said that it would cut jobs if its bid was successful.

Alitalia, which has been hit by strikes over restructuring plans and loses €1 million (£719,000) a day, has been trying to find a buyer for nearly a year. Maurizio Prato, the chairman, has indicated that he favours the Air France-KLM offer, but union leaders said that “if Alitalia were to go to a foreign company we would, in effect, be the only big European country not to have a flag carrier”. (source: Timesonline) - Alitalia SpA in sight for Air France-KLM

As reported a couple of weeks ago in the entrepreneur, BHP Billiton Ltd., the world's biggest mining company, is finally studying the next steps in its takeover approach for Rio Tinto Group, which continues to reject talks on the $137 billion (£68.5 billion) proposal. Rio Tinto Group is the world's third-largest mining company and asked U.K. regulators yesterday to force BHP Billiton Ltd. to formalize its position. BHP Billiton Ltd. wants to create a company that would be the biggest producer of energy coal, copper and aluminium.

BHP Billiton Ltd is under pressure to increase its offer. Perennial Investment Partners Ltd., Argo Investments Ltd. and Baker Steel Capital Managers LLP say the three-for-one stock offer is too low. BHP Billiton Ltd needs to come back with an offer of 3.9 shares for every Rio share to get Rio to engage. BHP Billiton Ltd’s CEO, Marius Klopper (pictured) said in a speech for presentation to investors, ``We continue to believe that our proposal is compelling and in the interests of both sets of shareholders,'' (source: Bloomberg) - BHP Billiton's offer rejected

Pat Shanahan, Boeing's man on the hot seat offered customers yesterday and Wall Street the makings of a credible plan to keep the troubled 787 Dreamliner on track to meet its revised schedule.

But investors will have to fly on the faith of Shanahan's commendable record of fixing some of Boeing's most intractable problem programs. While offering insight into how he is making operational changes since the program schedule was reset in October, Shanahan, vice-president and general manager of the 787 program, and Boeing Commercial Airplane CEO Scott Carson offered few new details on the issues that matter the most to the 787's fate: namely, how to get from zero to six airplanes a month by 2009 and how exactly to prod some struggling suppliers such as Vought Aircraft to step up to the daunting challenge. Other key questions relate to weight reduction, aircraft certification, and suppliers being able to adapt quickly to engineering changes. (source: Business Week) - BP fined for a record amount (Article on Dreamliner delays)

Competition Commission’s Business and Enterprise Secretary, John Hutton, is expected to publish within the next week the Competition Commission’s conclusions from its inquiry into the legitimacy of BSkyB’s shareholding in ITV.

Mr Hutton can reject any penalty on Sky proposed by the commission, but is bound to accept the regulator’s in-principle findings — as long as they are purely on competition grounds. Yesterday, the commission inquiry team met to consider the case and will now finalise its report in the hope of delivering it to Mr Hutton this week.

The regulator is expected to repeat its provisional conclusion that Sky’s 17.9% ITV stake is too high and in breach of competition law. Mr Hutton then has up to 30 days before he publishes the commission’s report. Sky is 39.1% owned by News Corporation. The level to which the commission wants Sky to sell down is not clear and Sky has said that it was willing to put a 3.9% holding into an independent trust. (source: Timesonline) - Heathrow voted worst airport (article on BSkyB ITV shares)

Lemsip & Dettol brands sold to Reckitt Benckiser

The owner of brands such as Lemsip and Dettol, Reckitt Benckiser, took its first steps into the US healthcare market yesterday by unveiling a £1.1 billion all-cash deal to buy Adams Respiratory Therapeutics, a Nasdaq-listed pharmaceutical company. Adams, markets two cough mixtures in the US, Mucinex and Delsym, which together generate annual sales of more than $322 million (£157 million).

Reckitt will pay $60 a share for the company, representing a 37% premium to Adams' closing price of $43.68 on Friday. It is the Anglo-Dutch group's second major acquisition in the over-the-counter pharmaceuticals sector in the past two years. Last year, the group bought Boots Healthcare International, which includes the Strepsils and Disprin cold remedy brands, for £1.93 billion.

Mr Becht, chief executive, said the deal would be immediately earnings enhancing, adding that the group expects to achieve "substantial" cost synergies from the acquisition, although there would be a one-off restructuring charge of $60 million. (source: The Independent)

Reuters is in discussion with The New York Times about supplying business news to the American newspaper, after reaching a similar agreement with its sister title the International Herald Tribune .

The tie-ups are designed to augment both titles’ business coverage, in an attempt to fend off the competitive threat from The Wall Street Journal , which is due to be acquired by News Corporation this week.

From January, the International Herald Tribune will feature five or six pages of business coverage under the brand Business with Reuters and part of the newspaper’s website will be co-branded.

Rupert Murdoch, the chairman and chief executive of News Corporation, plans to broaden The Wall Street Journal’ s focus so that it better competes with The New York Times on its home turf, and to invest in its international editions to compete with the International Herald Tribune abroad. (source: Timesonline)

Alfred McAlpine to be sold

Alfred McAlpine is to be sold to Britain’s second biggest construction company, Carillion, for £572 million to create one of Britain’s biggest support services and construction companies. It is understood that Carillion will pay 558p per share for London-based McAlpine.The offer was down from its previously agreed 585p a share proposal. News of the deal sent McAlpine shares up 27p to 518p, while Carillion shares were down 22.25p to 341.25p at 9.15am.

The purchase, which creates a company with annual sales of about £4.7 billion, will give Carillion direct access to raw materials used in construction and generate annual savings of £30 million. The deal will also boost Carillion’s position in other support services, adding McAlpine's strength in financial services and retail to its existing focus on education, health, defence, transport infrastructure, telecommunications and insurance.

Carillion said it had already received favourable responses from McAlpine directors and investors representing 17.9% of the issued shares in the company. In August, McAlpine announced plans to split into two listed companies, effectively demerging support services from its construction activities, which it planned to complete during the spring of next year.

McAlpine had previously rejected two approaches from Carillion, one in October priced at 570p per share and the other in August at 560p. It rebuffed both proposals because it said it believed they materially undervalued the company. (source: Timesonline)

Drawing up this year’s list for businessman of the year has provoked a furious debate among The Sunday Times business staff, and there were verbal fisticuffs over the omission of, for example, Emilio Botin, chairman of Banco Santander, the fast-growing Spanish bank. This has been the year when the gift of perfect timing has separated the great from the merely good. Our finalists have demonstrated the knack of putting themselves, and their organisations, in the right place at the right time.

Botin got the best of the biggest financial-services deal of all time, when a consortium led by Royal Bank of Scotland bought ABN Amro, the Dutch bank, for €71 billion (£51 billion). While Botin was a junior partner in the consortium, he managed to sell on ABN’s Italian assets for a tidy €2 billion profit.

Sergio Marchionne, leader of the remarkable turnaround at Fiat, was a contender, as was Katsuaki Watanabe, president of Toyota, which is on the brink of overtaking General M as the world’s No 1 carmaker.

John McAdam, chief executive of ICI, who was a finalist last year, only narrowly missed out again for doing a great job in selling the chemicals group to Dutch rival Akzo Nobel.

The Times now invite you to have your say. Please e-mail them at businessperson2007@sunday-times.co.uk and let them know what you think. Your opinions will help the judges choose from an impressive field.

Lloyd Blankfein, GOLDMAN SACHS
The Goldman Sachs chief executive grew up in a tough Brooklyn neighbourhood and won a scholarship to study law at Harvard. When he joined the famed investment bank, he wondered how he would ever survive. But survive he did, and prospered, reinventing himself and becoming one of the key architects of the bank’s own reinvention.

Goldman has moved from a firm that made money by giving advice on deals, to doing deals itself. And it called the credit crunch better than rivals, paring back sub-prime exposure early in the year and hedging most of what remained.

Clive Cowdery, RESOLUTION
This year saw the battle of the “zombie” funds – pools of life-insurance funds that have stopped to write new business, but live on to service current policy-holders.

The big winner was Clive Cowdery, founder and chairman of Resolution, one of the first and largest of the zombie players, who will walk away with £151m after selling the group to rival Pearl.

Less than four years ago, Cowdery had the vision to set up Resolution with £500,000 of his own money. The firm pulled off a number of deals, then merged with Britannic and embarked on a frenzy of ever-bigger transactions, becoming a FTSE 100 company worth £5 billion.

This year he proved a pragmatic dealmaker. Having agreed a merger with Friends Provident, he flushed out Standard Life and then Pearl, netting another £200m for shareholders.

Clara Furse, LONDON STOCK EXCHANGE
This will be the first Christmas in three years that Clara Furse, chief executive of the London Stock Exchange, has not spent in the heat of a takeover battle.

She has made a name for herself in the City for saying no. Over the past two years, she has seen off approaches ranging from Australia’s Macquarie and Germany’s Deutsche Börse to America’s Nasdaq.

But that in itself does not make her a candidate. What does is her nimble-footedness in ensuring that despite the multiple takeover distractions, the LSE has enhanced its reputation as a global centre for equity fundraising.

With the acquisition of Italy’s Borsa Italiana, Furse has retaken the initiative and if she does want to pursue further tie-ups with other exchanges, it will now be of her own volition.

Chris Hohn, TCI
When Chris Hohn, who heads the TCI fund, blocked Deutsche Börse’s bid for the London Stock Exchange last year, he was dubbed a “locust” by the German establishment. But even his admirers were stunned by his target this year: ABN Amro, the pillar of the Dutch establishment.
In February, Hohn dropped a letter to ABN’s chairman dissecting the bank’s failings, lambasting its “terrible” shareholder return and demanding the bank break itself up or sell itself. While the Dutch establishment spluttered, the letter kick-started the biggest financial-services takeover battle of all time.

Steve Jobs, APPLE
The Apple boss won three years ago, and he is back in the running again, despite some opposition. “You can’t put Jobs in,” moaned one member of the business team. “The iPhone isn’t the iPod.”

There are a lot of customers who would beg to differ.

Jobs makes the final 10 because the iPhone, a device that incorporates a mobile phone, music player, web browser and personal organiser, represents the fifth major industry (personal computing, desktop publishing, film animation, and music retailing were the four before mobile phones) he has shaken up in a remarkable business career.

This fact is pointed out in this month’s Fortune magazine, which makes Jobs No 1 in its annual list of the most powerful business people in the world.

Finian O’Sullivan, BURREN ENERGY
Burren Energy began 12 years ago in O’Sullivan’s garage in Hampshire. Ten days ago it agreed a £1.7 billion takeover by Eni, the Italian oil group, with the possibility of a higher counter-offer from KNOC, South Korea’s national oil company still to come.

This rapid accumulation of wealth was based on O’Sulli-van’s willingness to go where others would not – resource-rich but uncomfortable places like the Democratic Republic of Congo and Turkmenistan.

John Paulson, PAULSON & CO
The sub-prime crisis brought financial hardship and woe to most major financial institutions, but success and a fabulous pay-day to hedge-fund managers like John Paulson, who runs Paulson & Co from offices in Madison Avenue, Manhattan.

Last year Paulson told investors he thought the American sub-prime mortgage market was going to crash, and raised $2 billion for two funds that would bet that way. By the end of September, the two funds were worth $8 billion.

It is estimated that his firm’s reward for such confidence will eventually be between $2 billion and $4 billion, making him the highest paid hedge-fund manager in history.

Ratan Tata, TATA
The head of one of India’s largest and oldest business empires had a breakthough year in his bid to go global. He paid $6.7 billion to win control of Corus, the Anglo-Dutch steel group that contains the rump of British Steel.

The deal made Tata Steel an international force, and demonstrated to the world that Ratan Tata was prepared to be aggressive in his move offshore.

Next on the radar are Jaguar and Land Rover, the British car marques, for which Tata Motor is the leading bidder.

Willie Walsh, BRITISH AIRWAYS
The chief executive of British Airways has a lower profile than his predecessor, the charismatic Sir Rod Eddington, but has tackled the difficult issues that have dogged the airline for years.

The biggest of these was the company’s hefty pension deficit, which has (hopefully) been dealt with through a funding deal laboriously hammered out with trustees and unions.

Walsh has also confronted some of the company’s old-fash-ioned working practices in the run-up to a move next year to a new base at Heathrow.

BA now has a fair chance of meeting its long-held goal of a 10% profit margin, and Walsh is even looking at growth, with a big new aircraft order, expansion at London City airport anda plan to launch transatlantic services from the Continent.

Wendelin Wiedeking, PORSCHE
This year Wiedeking, Porsche’s maverick boss, will earn about €70m, making him probably the best-paid industrial executive in the world.

His remuneration has sparked political controversy in Germany, but you can’t deny he is being rewarded for success. Not only has Porsche brilliantly widened its niche sportscar market, with sales growing from 12,000 a year 15 years ago to 100,000 now, but it has increased earnings by taking a large hedge bet on the weakening dollar.

What’s more, as a result of a power play executed against the backdrop of manoeuvring between two of Germany’s most famous industrial families, the Porsches and the Piechs, Porsche is now poised to take majority ownership of Volkswagen, a much larger car company and possibly the only one with a realistic chance of challenging Toyota’s dominance.

PREVIOUS WINNERS
2006 Lakshmi Mittal, chief executive of Arcelor Mittal
2005 Sergey Brin and Larry Page, the founders of Google
2004 Steve Jobs, chief executive of Apple
2003 Sir Ken Morrison, chairman of Wm Morrison
2002 Eliot Spitzer, New York attorney-general

News Corporation on taking over Dow Jones

With a week to go before the News Corporation, owned by media mogul Rupert Murdoch, takes control of Dow Jones & Company, there are already management changes under way at the top of Dow Jones. Richard F. Zannino, Dow Jones’s chief executive, will leave the company after staying for a time to help with the transition, to be succeeded by Les Hilton, executive chairman of News International. News International includes News Corporation’s British newspapers: The Times of London, The Sunday Times, The News of the World and The Sun.

Executives at both companies say there will be a broader sweep of the upper echelon at Dow Jones in the next few weeks, both to eliminate duplication and to make way for Mr. Murdoch’s people. Mr. Zannino’s departure was announced by the company yesterday, a week ahead of the shareholder vote that is expected to seal the deal. He will stay on through a transition period.

Mr. Zannino said the choice to leave was his; others at Dow Jones were divided as to whether that was so, while some said the decision was mutual. Mr. Murdoch has a history of putting his loyalists atop newly acquired operations. Mr. Zannino is also in line for a financial windfall when he leaves, under a change-of-control provision Dow Jones adopted last summer. His exit package is worth more than $26 million (£13 million), including $3.4 million (£1.7 million) in severance pay and nearly $7 million (£3.5 million) in shares, according to estimates from James F. Reda & Associates, a consulting firm.

Mr. Zannino, 49, who became chief executive almost two years ago, is widely credited with making Dow Jones run more efficiently, and he led a shift toward electronic media and away from ink and paper. Under him, Dow Jones bought MarketWatch.com and the half of the Factiva archive service that it did not already own, and sold several small newspapers. News Corp is acquiring Dow Jones for about $5 billion (£2.5 billion) in a deal that is expected to close next week.

In an interview yesterday, Mr. Zannino said his legacy would be “getting us all to think like a media company rather than a newspaper company; viewing The Wall Street Journal as a franchise, as opposed to a newspaper.” (source: The New York Times) - New Bid for Northern Rock by Olivant

News Corporation has confirmed that James Murdoch, the chief executive of BSkyB, has been appointed as its new chairman and chief executive for Europe and Asia. Mr Murdoch will step down from his role as chief executive at BSkyB but will become non-executive chairman and succeed his father, Rupert Murdoch, who has stepped down as a director of the broadcasting group.

He will report to Peter Chernin, president and chief operating officer of News Corporation.
James Murdoch will be replaced by Jeremy Darroch, who is the chief financial officer of BSkyB. Sky is 39.1% owned by News Corporation. Commenting on the appointment, Rupert Murdoch, chairman and chief executive of News Corporation, said: "James is a talented and proven executive with a rare blend of international perspective and deep, hands-on experience in improving operational results. This is the right time to align our operations in Europe and Asia under new, structured group leadership."

The decision to move Mr Murdoch, who will become chairman of News Corporation’s European and Asian businesses, clearly positions the 34-year-old as the most likely successor to his father's leading roles at News Corporation, the media group that also owns the MySpace website and the Fox film studio.

James Murdoch, who was previously a member of News Corp's board between 2000 and 2003, said today: "I am excited to be rejoining News Corporation in this new role leading News Corporation's businesses across Europe and Asia, and I am delighted to continue working with the exceptional team at Sky in my new role as Non-Executive Chairman and as a Director." (source: Timesonline) - BSkyB buys Amstrad

RAB Capital, one of Northern Rock's largest shareholders, has confirmed it is backing Olivant's rescue bid for the stricken bank. Luqman Arnold's Olivant Advisors today said it has received non-binding letters of commitment from five institutional Northern Rock shareholders, who own 23% of the stricken bank, casting doubt on the future of Virgin Money's rescue offer. RAB, holder of 6.6% of Northern Rock, has confirmed it is supporting the former Abbey National chief executive's bid.

SRM Global, the largest shareholder in Northern Rock with over 9%, was unavailable to comment on whether it was backing Olivant's bid as Olivant has unveiled its proposal on the deadline for submitting bids to acquire the troubled mortgage lender which yesterday admitted for the first time that it has borrowed £25 billion worth of emergency funding from the Bank of England.

It also emerged last night that JC Flowers, which had been a serious contender to rescue Northern Rock, has pulled out of the race because it was unable to structure a deal that could both the Government and shareholders happy.

Olivant's proposal includes raising funds of up to £650 million through a rights issue. In contrast, Olivant said today it would issue the shares "at or around" the prevailing market price. Shares in Northern Rock hovered around the £1 mark again today after falling 1.46% to 101.5p. Richard Branson's Virgin Money, which is Northern Rock's preferred bidder, is also proposing raising £650 million through a rights issue but at a heavily discounted 25p.

Olivant said Northern Rock's total £25 billion in debt would be repaid to the Bank of England by the end of 2009 "through active operational management, accelerated through external market financing". The investment group said £10 billion to £15 billion of the £25 billion debt would be repaid after completion of the rights issue.

Olivant also confirmed it would retain the Northern Rock brand and that Mr Arnold be parachuted in to become Northern Rock’s executive chairman, with Kirk Stephenson, Olivant’s chief operating officer, taking up a role as a non-executive director at the bank. Virgin has indicated that they will change the Northern Rock name to Virgin. (source: Timesonline) - New Bid for Northern Rock by Olivant, Northern Rock offers below value, Final bids for Northern Rock today, New player in Northern Rock bid, Virgin pushes forward in takeover, BAA must halve queueing times to avoid fines, SAB Miller to buy Royal Grolsch, BHP Billiton's offer rejected

Alitalia SpA in sight for Air France-KLM

Alitalia SpA is said to be in sight for the world’s biggest airline, Air France-KLM Group, as it will try and revive the unprofitable carrier that the Italian government is trying to sell. Air France is one of three candidates to buy Alitalia, the Paris-based company said in a statement today. Deutsche Lufthansa AG of Germany and Italy's Air One may also present offers before today's deadline. Rome-based Alitalia will select a partner for exclusive talks by the end of the month.

Alitalia hasn't reported an operating profit in nine years and is losing more than 1 million euros ($1.5 million) a day. ``No one is going to pay a premium for Alitalia,'' said Gianmaria Bergantino, head of asset management at Bank Insinger de Beaufort NV in Rome, who owns Alitalia convertible bonds. ``Whoever buys it is buying it for its airport slots.'' He spoke before the announcement was made.

Air France-KLM has sent a non-binding expression of interest, it said today's statement. The company already owns about 2% of Alitalia, which was initially slated to join the 2004 merger between the French and Dutch airlines. The Italian carrier was excluded because of mounting losses. (source: Bloomsberg)

Despite trying for months to find a new non-executive chairman for Sports Direct is still looking for this corporate vacancy that is proving impossible to fill. The role would hand the lucky candidate a competitive salary and a once-in-a-life-time opportunity to etch their name in the City’s memory for years to come. Senior headhunters said yesterday that the task could prove extremely difficult, given the challenge of working alongside Mike Ashley, the tycoon who founded the business with one shop in 1982.

Rivals also point to another looming problem – the state of its Sports World and Lillywhites stores. John David Group said on Tuesday that it believed shoppers were getting “tired” of the discount approach taken by Sports Direct, which has made its name on the back of a “pile ’em high, sell ’em cheap” strategy.

Shares in Sports Direct have plunged since listing in March at 300p in a float that handed Mr Ashley a £929 million windfall. A profit warning last month pushed the stock to a new low of only 93.25p. Yesterday they closed at 100p. Despite his vast experience as a retailer, Mr Ashley has admitted that he was “very green” when he floated the business and that he found being in charge of a public company “challenging”.

Analysts believe that Mr Ashley could soon buy the business back. He has a near 68% stake and Sports Direct will ask investors for the right to buy back more shares at an extraordinary general meeting in two weeks. (source: Timesonline)

PepsiCo is set to deal a blow to Apple’s dominance of online music and the music labels’ best efforts to fight piracy. Pepsi is preparing a year-long marketing campaign in the United States in which up to a billion digital music tracks will be given away. Based on the prices charged by Apple, the largest online music retailer, the offer could be worth up to $1 billion (£490 million).

Crucially, the drinks group is believed to be teaming up with Amazon.com, the online retailer vying with Apple’s iTunes music store, to distribute the giveaway tracks. It is also thought that the music will be distributed free of the digital rights management (DRM) technology that limits where legitimately downloaded tracks can be played.

There is speculation that PepsiCo’s huge distribution of DRM-free music could compel other labels, such as Warner Music and Sony BMG, to use the format. This year Steve Jobs, the chief executive of Apple, said that he would drop DRM “in a heartbeat”, but claimed to have had his hands tied by the labels.

Pepsi’s promotion – the latest shot in its long battle with Coca-Cola – is to start in February, in concert with the Super Bowl, one of the biggest advertising magnets in the world. It echoes a giveaway in 2003, in which Apple and Pepsi offered 100 million free tracks Amazon’s music ambitions need a boost. Since it began its download service in September, it has captured an estimated 3% of the market. By contrast, Apple accounts for about 80% and in July said that it had sold more than three billion songs.

PepsiCo is planning to place tokens on five billion drink containers. Consumers will have to collect five tokens to qualify for free tracks. In theory, the campaign could flood the market with $1 billion of free music (Apple charges 99% per DRM-free track), but redemption rates on these types of offers are usually low, at about 2%.

Despite Apple’s success, online music sales still account for only a tenth of the total market and are not yet growing at a rate to compensate for the decline in revenues from CDs – sales of which have fallen by about a fifth in America this year. (source: Timesonline)

New Bid for Northern Rock by Olivant

The former Abbey chief executive consortium (Olivant) led by Luqman Arnold, is expected to table a revised bid for Northern Rock by the end of tomorrow. It is understood that Olivant is to be in talks with both Northern Rock and potential funding banks as it hammers out the final details of its offer. This comes after revised bids from JC Flowers and Cerberus, the American private equity firms, despite Virgin Group winning preferred-bidder status in the auction of the troubled Newcastle-based bank.

The bank was forced to seek emergency funding from the Bank of England after it failed to raise cash in the wholesale markets as a result of the credit crunch. Meanwhile, staff at Northern Rock have been handed a £200 Christmas bonus and are also understood to have received a 2% one-off sum and 4% salary increase.

Shares in Northern Rock closed down 6p at 103p yesterday. (source: Timesonline)

News Corporation, parent company of The Times, bought the leading American religious website Beliefnet yesterday for an undisclosed amount in an effort to tap the faith market in a country where 88% of the population say that they pray regularly.

Beliefnet, formed eight years ago, attracts 3.1 million monthly users. It was sold by its founder Steve Waldman, who wanted to find a big media company willing to provide investment that the standalone business could not afford.

News Corp is perhaps best-known for its newspapers, with titles such as The Sun and the New York Post, and mass entertainment through the 20th Century Fox film studio. However, the media group also owns a handful of faith-based businesses, including Zondervan, the largest Christian publisher in the United States, and Fox Faith, which makes faith-based films.

Appealing to a Christian audience is big business in the United States, where films such as Walt Disney’s The Lion, The Witch and The Wardrobe are marketed, at least partly, at a Christian audience. Mel Gibson’s 2004 film The Passion of Christ earned $611 million (£295 million) worldwide despite an uncompromising narrative, of which $370 million (£135 million) was taken in the United States.

The website will be absorbed into News Corp’s Fox Entertainment Group, owner of the Hollywood film studio, rather than its Fox Interactive Media division, which is the group that includes MySpace, the social networking website. (source: Timesonline)

Founder of the five-year old Nectar card programme, Sir Keith Mills, set himself up for a £161m payday yesterday after agreeing to sell the customer loyalty company he started. Aeroplan, operator of Air Canada's frequent-flier programme, agreed to pay £350 million ($700 million) in cash for Loyalty Management Group, in which Sir Keith holds a 46% stake. Most of the company's management, including the chief executive Alex Moorhead, will stay at LMG, though Sir Keith will step down as chairman.

Warburg Pincus, the private equity firm that granted £25 million ($50 million) in start-up funding for the business five years ago, will pocket about £117 million for its one-third stake, with the remainder going to certain top managers who held the balance of the private company's shares.

Nectar runs loyalty programmes with partners including J Sainsbury, BP, Barclaycard, and Debenhams. (source: The Independent)

Ambramovich to acquire 40% of Highland Gold

Russia’s richest main, Mr Roman Abramovich, will acquire a 40% interest in Highland Gold Mining Ltd for $400 million (£200 million) by subscribing to a new share issue in Russia's fourth-largest gold miner. Highland Gold, which produced 3.2% of Russia's gold last year, has seen its London-listed stock plummet to a record low this year after falling short of production targets and the disposal of a mine where 25 people died in a fire in 2006.

The financial and political clout of the billionaire helping Highland Gold Mining Ltd to fulfill expansion plans and acquire more assets in Russia has helped Highland's stock rose on Tuesday to its highest in over seven months. Gold prices hit a 28-year high last month as oil rose toward the $100 (£50) milestone and the dollar sank to record lows against the Euro. Russia has gold reserves second only to South Africa's, but ranks only sixth in terms of output. (The Guardian)

The world’s biggest Finland-based mobile handset maker, Nokia, is set to go head-to-head with iTunes to offer free music downloads to buyers of its new music phones. Nokia has announced a deal with Universal Music to provide the label's releases, and aims to ship more than 180 million music-enabled phones in 2008.

The company's intention to expand into music will be of concern to Apple, which dominates the digital music market with its iTunes online download store. Nokia’s executive vice-president and general manager for multimedia, Mr Anssi Vanjoki said: "Even if you listened to music 24 hours a day, seven days a week, you would still only scratch the surface of the music that we're making available," The company added that it was in discussions with a number of other record labels regarding the use of their material.

Meanwhile, at its annual investor day Nokia forecast that the overall market for mobile phone sales would grow by around 10 per cent next year. Last week the world's number two mobile maker, Samsung Electronics, estimated market growth of 12%. Nokia added that it expects margins of 20% from its phones and services business over the next couple of years and aims to increase market share.

Shares in Nokia fell around 4% on the margins announcement, with investors expecting a more positive forecast from its key business. (source: Timesonline)

De Beers sold historic Cullinan Mine

The world’s biggest diamond producer, De Beers (45% owned by Anglo American), said yesterday it had sold its historic Cullinan mine to the Petra Diamonds Cullinan Consortium (PDCC), consisting of Petra and Saudi investment firm Al Rajhi Holdings for R1 billion (£71 million) in cash. The PDCC consortium will each buy 37% stakes, with black-owned Thembinkosi Mining Investments getting 26%. De Beers Managing Director, Gareth Penny said “PDCC emerged as best bidder in a long selection process.”

Asked how the transaction would be funded, Penny said the money had been raised through a special purpose vehicle. The deal is expected to be concluded in April or June, depending on Competition Commission approval and the successful conversion of De Beers's mining right from old order to new order, and the transfer of that mining right to Petra and Thembinkosi.

The deal brought a major resource to the group. The sale was in the economy's interests as Cullinan mining would continue. The new players have studied Cullinan's cost structure and they have a plan in place to turn it around, it is understood. The 3106-carat Cullinan Diamond was found at the mine. This is the third mine De Beers has sold to Petra, regarding them as unprofitable; the others were the Koffiefontein and Kimberley underground mines. In the year to December, De Beers produced 1,15-million carats at Cullinan, with a market value of R505 million (£36 million). (source: Business Day)

TomorrowNow, the SAP unit at the centre of corporate spying scandal, is being eyed by US-based provider of software support, Rimini Street. Chief Executive of Rimini Street, Seth Raving, said “we are interested, but we are proceeding cautiously and need to analyse it first." AP, the German software group, revealed at the beginning of the week that it was exploring options for the troubled unit, including selling it.

Mr Ravin was among the founders of the Texas-based TomorrowNow and sold the company to SAP almost three years ago. He declined to say whether talks were going on with SAP. Oracle, SAP’s arch-rival, filed a lawsuit earlier this year accusing SAP or corporate espionage. In the wake of the scandal, TomorrowNow's chief executive and several senior member of management resigned on Monday.

SAP is under pressure to announce a swift solution for TomorrowNow in order to avoid further damage to its image. Mr Ravin said “Since SAP's announcement, Rimini Street had received a dozen enquiries from TomorrowNow customers, exploring a possible transition.” Customers were uncertain since SAP had not been clear about "what they are doing with TomorrowNow," he added. (source: msnbc)

Airbus is under life-threatening circumstances as the weakness of the dollar is threatening the survival of the European planemaker. Airbus chief executive Tom Enders has told employees in Germany, “the dollar’s rapid decline is life-threatening for Airbus. The dollar exchange rate has gone beyond the pain barrier.”

Mr Enders made the claim as he gave warning that European production plants would have to face major cost cuts to help them counter the impact of the currency. The calls from the head of Europe's biggest manufacturer will increase the pressure on European ministers and the European Central Bank to take action against the continually weakening dollar.

The weak dollar is favouring Airbus's arch rival Boeing, the company claimed. The dollar hit a new low against the euro yesterday. In the year to date, the euro has gained about 12.5% against the US currency.

This gives Boeing a massive advantage over Airbus, which is struggling to win back the lead position in aeroplane sales from the American group after it was destabilised and pushed into losses by delays to production of the new aircraft. (source: Timesonline)

Silverjet gets new lifeline

Silverjet, the business class only airline founded by Lawrence Hun, has secured a funding lifeline from a group of wealthy private investors including the billionaire property tycoons the Reuben brothers (Simon & David). The AIM-listed airline, flying from Luton to New York and also Dubai, postponed its results this week, triggering a wave of speculation over its future.

The Sunday Times has learned that the delay was to accommodate negotiations over a new funding package. The airline has raised £12 million from a placing of new shares, and £10 million in a loan from a company controlled by the Reubens. The loan can be converted to shares at a later date.

The Bombay-born Reuben brothers have amassed a fortune estimated at £2.5 billion, and are best known in the UK for a string of big property deals. Details of the deal are expected to be announced tomorrow when the company publishes its results.

Silverjet raised £25 million from a float in 2005 and in April this year it raised another £24.6 million by issuing new shares at a slight discount to the market price. Silverjet is likely to use the new funds to buy two new aircraft and expand services.

The business-class only airline has a luxurious private terminal at Luton, and flies 100-seat Boeing 767s twice a day to New York and daily to Dubai. (source: Timesonline)

The co-founder of Hotmail, the web-based e-mail service bought by Microsoft for $400 million a decade ago, is challenging the American software giant’s core $20 billion (£9.7 billion) office desktop business. Yesterday Sabeer Bhatia released a free online rival to the bestselling Office suite of applications that will allow users to view, share and edit documents from any computer.

The Indian-born Stanford graduate said that Live Documents would pose a “significant” challenge to Microsoft’s propriety software business, which eventually would be made redundant by the evolving internet applications industry. Office, bundling the Word word-processing, Excel spreadsheet and PowerPoint presentation tools, accounted for a third of Microsoft’s total revenues last year. It is forecast to top $20 billion (£9.7 billion) this year.

Mr Bhatia said “We are just a few years away from the end of the shrink-wrapped software business. By 2010, people will not be buying software. This is a significant challenge to a proportion of Microsoft’s revenues.”

Live Documents is similar to Google Apps, launched in February and used by companies including Proctor & Gamble, General Electric and Capgemini as a cheaper alternative to Microsoft. However, Mr Bhatia claims that his product is superior to Google’s in its range and quality, most crucially because it mimics Office 2007. Most of Office’s estimated 500 million customers have yet to upgrade from the 2003 version, while it is not available for Apple computers.

He said. “This will do for documents what Hotmail did for e-mail. Why spend $400 on an upgrade when you can get it for free?” Mr Bhatia and Jack Smith devised Hotmail, named after HTML, the language of the web, soon after leaving Apple in the mid1990s. Today it has more than 450 million users. (source: Timesonline)

BAA must halve queueing times to avoid fines

The Civil Aviation Authority (CAA) has told BAA that they must halve queueing times at Heathrow and Gatwick or face annual fines of up to £75 million. In a move that would increase the financial pressure on Britain's largest airport operator, the new regime will add hundreds of millions to BAA's security bill. The CAA plans to punish the group if security queues are more than five minutes for 95% of the time, with a maximum queueing time of 10 minutes at Heathrow and 15 minutes at Gatwick. Harry Bush, the CAA's director of economic regulation, said the airports' performance this year would have triggered heavy fines under the new regime, due to come into force next April.

BAA has been fined £2 million this year for missing performance targets, including the current guideline that passengers should queue for no longer than 10 minutes in security areas. But it is not all bad news as the CAA is also offering a bonus of up to £32 million to BAA if it outperforms. Bush admitted that the airport owner would struggle to bring down queueing times sufficiently and said "these are quite difficult targets."

The CAA also outlined plans that could reduce BAA's annual cashflows by £150 million between 2008 and 2013. The regulator, which sets landing charges and the return on investment at BAA's largest airports, said it planned to cut the return on capital at Heathrow from 7.75% to 6.2% and at Gatwick from 7.75% to 6.5%. BAA said that would endanger projects such as the £3.5 billion redevelopment of Heathrow's central terminals and did not accommodate the cost of a tougher security regime.

Airlines criticised CAA proposals to increase landing charges at Heathrow by 15.6% to £11.97 a passenger, with annual price rises capped at 7.5% above inflation. British Airways, BAA's largest customer, said service standards could be improved without an "excessive" rise in landing charges. BAA has warned the regulator that the landing charges would not be high enough to compensate for the reduced return on capital. (source: The Guardian)

It appears as if there are fresh interest in Northern Rock as the ailing bank said it has received further "indicative expressions of interest" from firms which might be considering a buyout or investment. Northern Rock said that one interested party may make an offer for the bank below its closing share price of 97p on Tuesday.

On Tuesday, US buyout firm JC Flowers submitted a bid that included an offer to shareholders of a "nominal value". And a second bid emerged on Tuesday from American private equity firm Cerberus. Shares in Northern Rock were down 15% at 82.60p in early London trade today.

The Bank of England has lent the bank an estimated £24 billion in emergency funding, a move defended by Chancellor Alistair Darling in the Commons on Monday. Northern Rock, which has about 6 000 staff, is keen to secure the bank's future as soon as it can. In a statement it said: "The company's advisors have begun discussions with a number of selected interested parties to clarify their proposals. The bank said: "These guarantee arrangements will protect all retail deposits held with Northern Rock regardless of the amount deposited and apply to all existing, re-opened and new retail accounts". (source BBC News)

In the battle for Apple’s iPhone, Vodafone has claimed a partial victory in a legal challenge to block a German rival from selling Apple’s iPhone exclusively. The German unit of the British mobile giant secured a temporary injunction yesterday against T-Mobile Deutschland after claiming that its deal with Apple breached local competition laws.

Vodafone said that the German operator should be forced to make the phone available over other networks, including its own. Success by Vodafone could force Apple to rethink its controversial business model for the phone.

T-Mobile will release a statement today detailing its full response to the injunction, which was granted by a court in Hamburg. It intended to appeal against the decision and threatened to sue Vodafone for damages.

The iPhone, which has amassed more than one million sales in the United States, went on sale in Germany this month. Buyers must sign a two-year contract with T-Mobile and the phone cannot be used on other mobile networks.

T-Mobile said yesterday: “We have spent months thoroughly testing the iPhone to ensure it works properly on our network. Given the approach adopted by the competitor Vodafone, which lost out to T-Mobile in the contest to distribute the Apple iPhone in Germany, T-Mobile reserves the right to examine the option of suing for maximum damages.”

Despite a fierce battle in the UK, Vodafone lost out to O2 , and in France, to Orange. However, Apple’s approach has already been tested in France, where local laws have forced Orange to open up the phone to other networks.

German analysts said that they expected the operator to comply with Vodafone’s demands and stock “unlocked” iPhones, which work over other networks. However, the injunction does not force T-Mobile to take any immediate action. A full hearing is scheduled for two weeks’ time. (source: Timesonline)

SAB Miller to buy Royal Grolsch

The world’s second largest brewer, SABMiller, has agreed to buy Royal Grolsch, the Dutch rival behind Grolsch lager. In its second major move on the international market in as many months, after agreeing to combine its American operations with those of Molson Coors, SABMiller is offering 48.25 euro per share, 84.3% above Grolsch's average closing price over the past month.

SABMiller, said that the management of Grolsch supported the offer, which values the Dutch company at 816 million euro (£582 million). As with earlier deals, SABMiller is paying a premium, offering almost 15 times the reported 2006 earnings before interest, tax, depreciation and amortisation.

SABMiller hopes to employ the Grolsch Premium Pilsner brand across Africa and Latin America, using it to tap into the lucrative premium segment of the market in those regions. In South Africa in particular, analysts expect the new member of the SABMiller family to help plug the gap after Heineken terminated SABMiller-subsidiary South African Breweries' licence to manufacture and distribute Amstel lager beer.

Yesterday's announcement also raised questions about SABMiller's position as a potential bidder for Scottish and Newcastle. Trevor Stirling, a beverages analyst at Sanford C. Bernstein, said “although I was almost certain SABMiller was interested in S&N, the balance of probability was against them making a bid. Scottish and Newcastle doesn't really have a well-known exportable brand like Grolsch. If SABMiller were to bid, it would be for the Russian assets and the 50% in BBH (Baltic Beverage Holdings)." (source: Google News)

Shares in Northern Rock plunged below £1 to an all-time low after Cerberus, the US private equity fund, walked away from making a rescue bid for the troubled mortgage lender as the market reacted to Chancellor Alistair Darling statement to the Commons yesterday. The Newcastle-based bank's shares fell 8 %t to 95.8p in early trading, valuing the group at £404 million. Just nine months ago, Northern Rock was valued at £5.2 billion when its shares reached a peak of £12.12 per share.

It emerged last night that Cerberus, one of four parties thought to be considering serious offers for the bank, has been put off making a concrete bid by continued turmoil in global financial markets. Its interest is also thought to have been affected by credit-related losses at GMAC, the former financing arm of General Motors that is now 51% owned by Cerberus. GMAC was expected to part-fund a Cerberus offer for Northern Rock.

The Government said yesterday that the line of credit that the Bank of England had extended to Northern Rock could not continue beyond February, because it would then contravene European rules on state aid.

Speaking before the Commons yesterday, Alistair Darling refused to give a guarantee that the £24 billion the Bank of England has so far lent Northern Rock will ever be fully repaid, leaving tax payers to foot the bill for the crisis. (source: Timesonline)

Luton Based low-cost airline, Easyjet, has seen annual pre-tax profits rise after carrying 37.2 million passengers in the year to 30 September. The Luton-based carrier said profits were up by 56% to £201.9 million ($431 million; 294 million euros), with its load factor, which shows how full flights are, at 84%.

In the past year Easyjet added eight destinations and 46 routes, bringing its network to 289 routes, using 77 airports in 21 countries. But it said rising oil prices meant the "fuel environment remains challenging".

Andy Harrison, Easyjet chief executive, said: "Despite challenging conditions, revenue, profit and return on equity have all shown strong improvements reflecting the success of our focus on low cost with care and convenience. At the same time as driving the financial performance of the business, our now well established management has also expanded Easyjet's network and fleet, which carried over 37 million passengers in the year, making the airline the fourth largest in Europe."

Easyjet said it expected to complete the £103.5 million purchase GB Airway by 31 January 2008. (source: BBC News)

Northern Rock offers below value

It is understood that the two suitors, Virgin Group an Olivant Advisers, for Northern Rock have made offers for the takeover of Northern Rock that is "materially below" the stricken bank's share price. The bank said that it expected further expressions of interest to emerge.

Separately, the government has said there is no certainty that any bidder for the Rock will have access to £24 billion of emergency loans after February, but it added that it was "willing to discuss" any proposals that envisaged a continuing role for the Bank of England, the Treasury and the Financial Services Authority. The Treasury has also warned that the support it has provided to Northern Rock represents state aid under EU rules and may therefore turn out to be illegal.

Chief Executive at Northern Rock who resigned on Friday, Adam Applegarth, said that “while it would still analyse and discuss proposals it had received the value to shareholders from any of the proposals remains highly uncertain. They would depend on factors including an improvement in market conditions such as access to liquidity.”

Northern Rock shares fell 2% in early trading to 129p. They had hit a high of £12.58 in February. (source: BBC News) - Final bids for Northern Rock today, New player in Northern Rock bid, Virgin pushes forward in takeover, It is all about Virgin

Google is on the verge of becoming a mobile phone operator. The company is secretly testing a wireless network at the Googleplex in Mountain View, California, as it tries to gain valuable technological experience before a decision on whether to bid for part of the US mobile telecoms spectrum.

Google has made so much money from its computer based search that it has $13.1 billion (£6.3 billion) sitting in its bank accounts, and it has been spending heavily on new ideas to help it move into the search business on mobile devices. Analysts believe the market for placing ads alongside search queries on smartphones may eventually eclipse PC-based revenues.

While Google could still hitch up with a more experienced telecoms partner to make its pitch, it is believed to be leaning towards a go-it-alone bid that could cost it $4.6 billion (£2.2 billion) or more. A bid for a part of the telecoms spectrum would be an audacious way of circumventing the existing US mobile carriers – AT&T, Sprint, Verizon and T-Mobile – with whom Google is frustrated because they restrict which handsets and internet services can be used over their networks. Sandeep Aggarwal, analyst at Oppenheimer, said that the existing carriers are the biggest obstacle to Google getting into search-based advertising on mobile phones. However, he said: "We think that Google's bidding in the spectrum auction in the US makes sense only if it can materially subsidise or offer free wireless services without losing money, can run wireless services better than the existing wireless carriers, and find more uses for the spectrum bandwidth to drive additional economic value." (source: The Independent)